A Lock and Load Battle Over Music

In taking on piracy, record labels may hobble consumers' ability to enjoy songs using PCs.

The record labels haven't found a way yet to profit from consumers' infatuation with file swapping and CD burning, so they're doing what all media industries have done in the face of disruptive new technologies: They're looking for a way to kill them.

Today, all five of the major record companies are experimenting with technologies that lock songs to their original CDs, preventing people from copying music onto a computer or another CD.

The latest of these technologies creates "dual session" CDs that include two sets of songs. One set can't be copied to a computer. The other can, but can't be shared over the Internet or burned onto a new disc.

The goal is to combat piracy, but one consequence could be depriving consumers of some of the new ways they've found to enjoy the CDs they buy.

For example, they wouldn't be able to make compilation CDs for parties or car stereos, and they might not be able to move the songs to their portable MP3 players.

"I think the labels are going to find a consumer backlash there that's going to be unwelcome to them," said Phil Leigh, an analyst with the Raymond James & Associates investment bank.

The labels have secretly been testing CDs that can't be copied or, in some cases, even played on a computer. The tests have prompted an outcry online, with many devotees of PC-based music sharing tips on how to defeat the copy-protection software.

"The discs that are clearly protected have been broken" to enable copying, said Andy McFadden, a software engineer in Sunnyvale, Calif. But he added, "Neither the music industry nor the CD crackers have raised the white flag yet."

The point isn't to provide 100% security but to "keep the honest people honest," said Bill Whitmore of SunnComm Inc., one of the companies making copy-protecting technology. Besides, the labels can't stop home taping and other forms of analog copying. Instead, they're focusing on digital copying, which creates a perfect duplicate of the original CD.

Several record-company officials said they don't want to limit where consumers can enjoy the music they buy. Technologically, however, it's difficult to allow people to copy a CD for personal use without also permitting them to make hundreds of copies to sell on a street corner or hand out in the dorm.

"You don't want to irritate the consumer," one label official said. "We do want people to buy our records. But we also need to do something" about piracy.

The subject is so touchy that even the most voluble record-company executives don't want to be quoted on it. They recognize that in reining in consumers, they could alienate them.

Well more than 4 million copy-protected CDs have been released so far, most of them in Europe, according to the companies making technology for secure CDs. For a list of CDs that might be copy protected, visit Fat Chuck's Web site, at http://www.fatchucks.com/corruptcds.

The labels are swimming against a strong tide. The skyrocketing sales of CD recorders and blank CDs, the massive distribution of CD ripping software and the proliferation of computers with huge hard drives all reflect a seismic shift in what music lovers do with their collections.

Consumers--particularly young ones--are turning their computers into powerful electronic jukeboxes filled with songs copied from discs or downloaded from the Net.

Instead of listening to music in the packages put together by artists and labels, they're creating custom mixes on their computers and burning them onto CDs for their cars, portable players and friends.

Nevertheless, the labels are stepping up their efforts to develop secure CDs. The giant Universal Music Group has announced plans to release secure CDs this quarter, and Marc Tokayer, founder and chief executive of TTR Technologies Ltd., predicted that "we'll see a very big ramp-up toward the middle of next year." Based in a suburb of Tel Aviv, TTR is one of a handful of companies developing ways to block digital CD copying.

The companies all try to tweak CDs to cause problems for the CD-ROM drives in computers but not for basic CD audio players. It's not a simple task, though, because ROM drives aren't limited to computers--they're also found in many DVD players, high-end car stereos and portable devices.

The companies developing secure CD technology say their current versions produce discs that work on at least 99% of the existing CD players. "The technology's effective today," said Noam Zur, vice president of sales and marketing for Midbar Tech Ltd. of Tel Aviv.

Some record-industry executives disagree. "The technologies that are out there right now are far from where they should be in terms of playability," said Christa Haussler, vice president of new technology for BMG Entertainment.

Different labels have different expectations for what a secure CD should be able to do. Some are waiting for copy-protected discs that can be played on PCs as well as home and car stereos, and others are happy to sell discs that can't be played at all on a computer.